One week after Delta announced it is expanding a test using artificial intelligence to charge different prices based on customers' personal data—which critics fear could end cheap flights forever—Democratic lawmakers have moved to ban what they consider predatory surveillance pricing.
In a press release, Reps. Greg Casar (D-Texas) and Rashida Tlaib (D-Mich.) announced the Stop AI Price Gouging and Wage Fixing Act. The law directly bans companies from using "surveillance-based" price or wage setting to increase their profit margins.
If passed, the law would allow anyone to sue companies found unfairly using AI, lawmakers explained in what's called a "one-sheet." That could mean charging customers higher prices—based on "how desperate a customer is for a product and the maximum amount a customer is willing to pay"—or paying employees lower wages—based on "their financial status, personal associations, and demographics."
Tlaib called companies using AI to "exploit" workers in "desperate" situations "appalling," with the one-sheet specifically shaming delivery services that lower drivers' wages based on their "pattern of taking orders" and health care companies that base nurses' pay on "an algorithmically-manipulated-bidding war, not the tasks they perform."
The lawmakers also called out Delta among companies whose AI pricing plans, advocacy groups warn, stand to worsen the US "affordability crisis" that currently sees many Americans struggling to afford basic items, like groceries. Delta has confirmed it plans to "set 20 percent of prices using AI by the end of the year," lawmakers noted. And other companies "engaging in surveillance-based price setting" include giants like Amazon and Kroger, as well as a ride-sharing app that has been "charging a customer more when their phone battery is low."
Public Citizen, a progressive consumer rights group that endorsed the bill, condemned the practice in the press release, urging Congress to pass the law and draw "a clear line in the sand: companies can offer discounts and fair wages—but not by spying on people."
"Surveillance-based price gouging and wage setting are exploitative practices that deepen inequality and strip consumers and workers of dignity," Public Citizen said.
AI pricing will cause “full-blown crisis”
In January, the Federal Trade Commission requested information from eight companies—including MasterCard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co—joining a "shadowy market" that provides AI pricing services. Those companies confirmed they've provided services to at least 250 companies "that sell goods or services ranging from grocery stores to apparel retailers," lawmakers noted.